What is Commercial
Umbrella Insurance?
Commercial Umbrella insurance secures your business from potential financial harm of large claims that arise against your company. It is a form of Commercial Insurance that catches your General Liability, Auto Liability, and other forms of policies when they fall to their limits.
Business owners may think that large risks happen rarely. However, be reminded that huge risks can extremely ruin your business when they occur. Nonetheless, Commercial Umbrella Insurance helps support your business so you can reduce massive risks that may happen.
How Commercial Umbrella Insurance Works?
Commercial Umbrella Insurance works as extra protection if the coverage of your company’s insurance policy reaches its limit. It is a beneficial type of insurance that can extend the coverage limits of your actual insurance policies.
Commercial Umbrella Insurance, also called Excess Liability Insurance, supplies your primary insurance policies when they are not sufficient to cover the damages. For Commercial Umbrella to work, you will need an underlying insurance policy such as General Liability Insurance. Commercial Auto and Workers’ Compensation Insurance depending on the nature of your business.
Extreme damages from accidents may cause large claims and large financial compensation for the medical bills of bodily injuries. Commercial Umbrella will then pay for the balance up to the set limits of your umbrella policy.
What Does Commercial Umbrella Insurance Cover?
In reality, Umbrella Liability Insurance effectively serves as a backup for business policies you already have. It prevents you from using huge amounts of money out of the pocket when the claims against your business exceed your policy limits. Business Umbrella Insurance provides coverage for the following types of liability:
- General Liability Insurance
- Commercial Auto Insurance
- Employers Liability Insurance
Umbrella Insurance is set apart from most policies because it only applies when your insurance coverages reach their limits. It is like a remedy for the shortcomings of policy limitations due to large risks and claims.
You can make a separate claim on your umbrella policy; however, you will need to file two claims- one for your primary underlying policy and another for your umbrella policy. On the contrary, Umbrella coverage can take into effect automatically. Talk to one of our experienced insurance agents so you can check on which is most effective for you.
What are the Exclusions for Commercial Umbrella Insurance?
Generally, there are specific exclusions for Commercial Umbrella Insurance. Here is a list of factors that Commercial Umbrella excludes:
- Aircraft and Watercraft
- Data Breaches and Hacking
- Pollution
- Product recalls
Additionally, Umbrella Insurance excludes personal liability claims and penal damages. You should consult with an insurance agent for the details of which your policy can and can’t cover. Many Commercial Umbrella insurance policies can be negotiable depending on the insurance company. Insurers can adjust their priced premiums as per the agreement in the insurance contract.
Who Need Commercial Umbrella Insurance?
Whether you have a big or small business, if you know that your business is potential for significant risks, you definitely need Commercial Umbrella Insurance. Most probably, high risks can cause your existing liability policies to exceed their limits.
If your business is open to the public, it is considered a high risk because you are working with many people. As a result, your business is exposed to third-party injuries and property damages. The same is true if the type of business requires working on someone else’s property. If something goes wrong, you might need additional coverage to suffice the remains of your primary policy limits.
The truth of the matter is that if there are higher risks of third party damages, then there is a greater need for Commercial Umbrella coverage.
Common Factors Affecting Commercial Umbrella Insurance Costs
Like any other form of insurance, the rate of Commercial Umbrella varies depending on the details of your policy. To be specific, the price of the excess liability you choose to buy mostly determines how much you can expect to spend.
The rate of Commercial Umbrella also depends on the type of risks your business encounters. Here are the following factors that most insurers usually consider:
- Business Location
- Type of Business
- Claims History
- Number of Employees
- Business Size
Businesses with a high possibility of risks will have higher policy rates. For example, construction companies have higher premiums than computer program companies because they operate on someone else’s property. As a result, the level of liability risks increases, especially on third-party liability claims. It is always best to get a quote to help you get an accurate estimate of the rate of your insurance cost.
Additional Liability Coverage Options for your Business Needs
Apart from Commercial Umbrella Insurance, you may want to consider having other insurance policies that are very beneficial in protecting your business. These are:
D&O Liability Insurance provides protection for directors and officers in the event where they commit mistakes such as misleading statements or breach of duty.
Liquor Liability Insurance:
It is business coverage that can protect you when your business manufactures, sells, serves, or facilitates the use or purchase of alcohol.
EPLI provides coverage for lawsuits that arise against the employees.
Hire and non-owned auto liability insurance:
It covers owned or rented cars that business owners use for work-related operations.
Fire Legal Liability Insurance:
Fire Legal Liability applies when you are found responsible for a fire in the place you rent or lease.
Overall, acquiring additional coverage to secure your current policies can be one of the smartest decisions you can make to protect your business. Commercial Umbrella gives your extra business protection once your primary policies such as General Liability, Auto Liability, or Employer Liability reach their limits. The damages that accidents and disasters can cause is unpredictable. Therefore, choosing to have the right insurance policy can save your business from immense financial assets loss.
Our affiliated insurance agents will help you fill the gaps in your insurance needs. They can help you protect your business and determine how much coverage you will need for your primary policies.